Unifrax frees to trade; Sedgwick Claims, Infrastructure & Energy revisions emerge

By Sara Rosenberg

New York, Nov. 5 – Unifrax (ASP Unifrax Holdings Inc.) saw its credit facilities surface in the secondary market on Monday, with the first-lien term loan quoted above its original issue discount and the second-lien term loan bid in line with its issue price.

Switching to the primary market, Sedgwick Claims Management Services Inc. set the spread on its term loan B at the low end of guidance, added a step-down and revised the original issue discount.

Also, Infrastructure & Energy Alternatives Inc. (IEA) widened pricing on its first-lien term loan, eliminated a step-down, extended the call protection and made a number of documentation changes.

In addition, Rocket Software Inc., Algoma and Ring Container Technologies Group LLC released price talk with launch, and Solenis Holdings LLC, MSX International and Applied Systems Inc. emerged with new deal plans.

Unifrax starts trading

Unifrax’s credit facilities freed up on Monday, with the $600 million seven-year covenant-light first-lien term loan B quoted at par bid, par ½ offered and the $250 million eight-year covenant-light second-lien term loan quoted at 96 bid, 97 offered, according to a trader.

Pricing on the U.S. first-lien term loan is Libor plus 375 basis points with a 0% Libor floor, and it was sold at an original issue discount of 99.5. The debt has 101 soft call protection for six months.

The second-lien term loan is priced at Libor plus 850 bps with a 0% Libor floor and was issued at a discount of 96. This tranche has hard call protection of 103 in year one, 102 in year two and 101 in year three.

The company’s senior secured credit facilities also include a $125 million five-year revolver and a €310 million seven-year covenant-light first-lien term loan B.

Pricing on the euro first-lien term loan is Euribor plus 375 bps with a 0% floor and it was issued at a discount of 99.5. This loan has 101 soft call protection for six months.

Unifrax funding buyout

Proceeds from Unifrax’s credit facilities will be used to help finance its acquisition by Clearlake Capital Group LP from American Securities LLC.

Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC, UBS Investment Bank, RBC Capital Markets and Stifel, Nicolaus & Co. are leading the debt.

During syndication, the U.S. term loan was upsized from $550 million, the euro term loan size firmed from talk of $350 million equivalent and the second-lien term loan was downsized from $300 million. Also, pricing on the U.S. and euro first-lien term loans finalized at the low end of the Libor/Euribor plus 375 bps to 400 bps talk. And, pricing on the second-lien term loan was increased from talk in the range of Libor plus 775 bps to 800 bps, the discount widened from 99, and the call protection was changed from 102 in year one and 101 in year two.

Closing is expected late this month.

Unifrax is a Tonawanda, N.Y.-based supplier of high-performance specialty fibers and inorganic materials used in emission control, thermal management, filtration, battery and fire protection applications.

Sedgwick updated

Moving to the primary market, Sedgwick Claims Management firmed pricing on its $2.34 billion seven-year covenant-light term loan B (B2/B) at Libor plus 325 bps, the low end of the Libor plus 325 bps to 350 bps talk, added a step-down to Libor plus 300 bps at 4.5 times net first-lien leverage and moved the original issue discount to 99.75 from 99.5, according to a market source.

As before, the term loan has a 0% Libor floor and 101 soft call protection for six months.

Commitments were due at noon ET on Monday, the source added.

Bank of America Merrill Lynch, KKR Capital Markets, Morgan Stanley Senior Funding Inc. and SunTrust Robinson Humphrey Inc. are leading the loan that will be used with equity to fund the buyout of the company by the Carlyle Group from KKR in a transaction valued at about $6.7 billion. Stone Point Capital LLC and Caisse de dépôt et placement du Québec (CDPQ), together with Sedgwick management, will remain minority investors.

Closing is expected later this year, subject to customary conditions, including regulatory approvals.

Sedgwick is a Memphis, Tenn.-based provider of claims management solutions to corporations, public entities and insurance carriers.

IEA reworks deal

Infrastructure & Energy Alternatives Inc. lifted pricing on its $300 million six-year first-lien term loan (B+) to Libor plus 625 bps from talk in the range of Libor plus 550 bps to 575 bps, removed the leverage-based pricing step-down, changed the original issue discount to 96.5 from 99, extended the 101 soft call protection to one year from six months and increased amortization to 10% per annum from 1% per annum, a market source remarked.

Additionally, the first-lien net leverage covenant was revised to 3.5 times, stepping down to 2.25 times on Dec. 31, 2020, from 4 times, stepping down to 2.8 times on the second anniversary of closing, and the excess cash flow sweep was adjusted to 75%, stepping down to 50%, 25% and 0% at 1.76 times, 1.26 times and 0.76 times leverage respectively, from 50%, stepping down to 25% and 0% at 1.58 times and 1.08 times leverage respectively.

Furthermore, the incremental was changed to $80 million with the grower eliminated and the unlimited ratio set at 2.42 times, from $122.5 million and 100% consolidated EBITDA and an unlimited ratio set at closing leverage., and the 50 bps MFN was set for life for all pari passu term loans, instead of for 12 months, and the carve-outs for outside maturity and permitted acquisitions were eliminated.

IEA restricted payments

Infrastructure & Energy also changed the restricted payments general basket under its term loan to the greater of $15 million and 11% of consolidated EBITDA from the greater of $20 million and 15% of consolidated EBITDA, and the preferred stock redemption basket incurrence ratio was revised to 1.67 times from closing leverage, the source continued.

Another revision was the removal of the step-down to 50% at 1.08 times leverage from asset sale, which remained set at 100%, and the requirement for lender calls was adjusted to quarterly from annually.

Lastly, the general debt basket was changed to the greater of $20 million and 17% of consolidated EBITDA from the greater of $30 million and 25% consolidated EBITDA, and the non-credit party debt basket was modified to the greater of $20 million and 17% of consolidated EBITDA from the greater of $30 million and 25% consolidated EBITDA.

The term loan still has a 0% Libor floor.

IEA lead banks

Jefferies LLC and KeyBanc Capital Markets are leading Infrastructure & Energy’s $375 million of credit facilities, which also include a $75 million five-year revolver.

Commitments are due at 4 p.m. ET on Thursday, the source added.

Proceeds are being used to fund the acquisitions of Consolidated Construction Solutions I LLC for $145 million and William Charles Construction Group for about $90 million, including $85 million in cash and $5 million in equity.

Net leverage is 2.67 times.

Infrastructure & Energy is an Indianapolis-based infrastructure construction company with specialized energy and heavy civil experience.

Rocket sets guidance

Also in the primary market, Rocket Software held its bank meeting on Monday morning, and shortly before the event began, price talk was announced on its $1.24 billion seven-year covenant-light first-lien term loan (B1/B) and $320 million eight-year covenant-light second-lien term loan (Caa1/B-), according to a market source.

Talk on the first-lien term loan is Libor plus 400 bps to 425 bps with a 0% Libor floor and an original issue discount of 99.5, and talk on the second-lien term loan is Libor plus 800 bps to 825 bps with a 0% Libor floor and a discount of 99, the source said.

The first-lien term loan has 101 soft call protection for six months, and the second-lien term loan has call protection of 102 in year one and 101 in year two.

The company’s $1,685,000,000 of credit facilities also include a $125 million revolver (B1/B).

Rocket being acquired

Proceeds from Rocket Software’s credit facilities will be used to help fund its buyout by Bain Capital Private Equity from Court Square Capital Partners in a transaction with an enterprise value of about $2 billion.

Credit Suisse Securities (USA) LLC, Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs Bank USA, RBC Capital Markets and SunTrust Robinson Humphrey Inc. are leading the debt.

Commitments are due at 5 p.m. ET on Nov. 19.

Closing on the buyout is expected this quarter, subject to customary conditions, including regulatory approvals.

Rocket Software is a Waltham, Mass.-based provider of enterprise infrastructure software.

Algoma launches

Algoma came out with talk of Libor plus 475 bps to 500 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months on its $300 million seven-year covenant-light first-lien term loan that launched with an afternoon bank meeting, a market source said.

Commitments are due at 5 p.m. ET on Nov. 16, the source added.

Goldman Sachs Bank USA, Barclays and BMO Capital Markets are leading the deal that will be used for exit financing.

Algoma is a Sault Ste. Marie, Ont.-based steel producer.

Ring OID talk

Ring Container Technologies Group launched on its morning call its fungible $65 million incremental covenant-light first-lien term loan (B2/B) due Oct. 31, 2024 with original issue discount talk of 99 to 99.25, a market source remarked.

The incremental term loan is priced at Libor plus 275 bps with a 0% Libor floor, in line with the existing term loan, and is getting 101 soft call protection for six months.

Commitments are due at noon ET on Friday, the source added.

Bank of America Merrill Lynch, BMO Capital Markets and Antares Capital are leading the deal that will be used to refinance an existing second-lien term loan.

Ring Container is an Oakland, Tenn.-based manufacturer of plastic containers for dressings, sauces, oils, spreads and other related products.

Solenis readies loan

Solenis scheduled a bank meeting in London for Wednesday to launch a fungible $550 million equivalent U.S. and euro incremental covenant-light first-lien term loan due June 26, 2025, split between a $170 million tranche and a €330 million tranche, according to a market source.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Natixis, RBC Capital Markets, Macquarie Capital (USA) Inc. and ING are leading the deal that will be used to fund the combination of Solenis with BASF’s paper and water chemicals business.

Solenis is a Wilmington, Del.-based specialty chemicals provider serving the pulp & paper and water treatment industries.

MSX joins calendar

MSX International set a lender call for Wednesday to launch an up to $100 million term loan B-4 due January 2024 and a minimum €454 million term loan B-3 due January 2024, a market source said.

The term loans have a 0% floor and 101 soft call protection for six months, the source added.

Commitments are due at the close of business on Nov. 14.

HSBC and Nomura are the physical bookrunners on the deal. RBC is a bokrunner and the agent.

The new loans will be used to amend and restate senior facilities.

MSX, a Bain Capital portfolio company, is a business process outsourcing company.

Applied Systems on deck

Applied Systems will hold a lender call at 2 p.m. ET on Tuesday to launch a new loan transaction, according to a market source.

Nomura is the left lead on the deal.

Applied Systems is a University Park, Ill.-based cloud software provider to the property & casualty and benefits insurance industry.

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